“A hundred and twenty-two years after [the founder of modern Zionism Theodore] Herzl made his vision known, with this law we determined the founding principle of our existence,” Benjamin Netanyahu said.

“Israel is the nation state of the Jewish people, and respects the rights of all of its citizens.”

However, the law risks further alienating Israel’s large Arab minority, who have long felt discriminated against.

What does the law say?

Called The Basic Law: Israel as the Nation State of the Jewish People, the legislation essentially defines Israel first and foremost as a Jewish state.

It also reiterates the status of Jerusalem under Israeli law, which defines the city – part of which is claimed by the Palestinians as the capital of a future state – as the “complete and united… capital of Israel”.

Controversially, the law singles out Hebrew as the “state’s language”, effectively prioritising it above Arabic which has for decades been recognised as an official language alongside Hebrew.

It ascribes Arabic “special status” and says its standing before the law came into effect will not be harmed.

In one of its clauses, the law stresses the importance of “development of Jewish settlement as a national value”, though it is unclear whether this also alludes to settlement in the Israeli-occupied West Bank.

Why was this law created?

The question of Israel’s status as a Jewish state is politically controversial and has long been debated. Before now, it has not been enshrined in law.

Some Israeli Jewish politicians consider that the founding principles of Israel’s creation, as a state for Jews in their ancient homeland, are under threat and could become less relevant, or obsolete, in the future.

Fears over the high birth-rate of Israeli Arabs, as well as possible alternatives to a two-state solution to the Israeli-Palestinian conflict which could challenge Israel’s Jewish majority, have spurred on calls to anchor the Jewishness of Israel in law.

The bill has been under discussion since it was first introduced in 2011 and has undergone multiple amendments, with the final version watering down or dropping altogether sections regarded as discriminatory.

Israel has no constitution but instead passed over time a series of Basic Laws which have constitutional status. The nation state law is the 14th such basic law.

The issue of Israel as a Jewish state has become increasingly important in recent years and a key dispute between Israel and the Palestinians.

Benjamin Netanyahu has repeatedly insisted that the Palestinians must recognise Israel as a Jewish state in any final peace settlement. He argues that the Palestinians’ refusal to do so is the biggest obstacle to peace, saying it demonstrates that the Palestinians do not genuinely recognise Israel’s right to exist.

Palestinian President Mahmoud Abbas meanwhile has said he will never recognise Israel as a Jewish state, arguing that the Palestinians have long recognised the State of Israel and should not be expected to go further.

Why does it matter?

It is important because it is hugely symbolic, and according to Israel’s Arab minority, evidence that Israel is downgrading their status.

Israeli Arabs, many of whom identify as or with Palestinians, comprise about 20% of the country’s nine million-strong population.

They have equal rights under the law but have long complained of being treated as second-class citizens and say they face discrimination and worse provision than Israeli Jews when it comes to services such as education, health and housing.

Civil rights groups have denounced the law and some critics, including one Arab MP described it as apartheid – the state-sanctioned racial discrimination of black people during white-minority rule in South Africa.

Israel is often accused by its fiercest critics of practising a system akin to apartheid against Israeli Arabs and Palestinians in the occupied West Bank. Israel vehemently rejects the allegation as a smear tactic used by those who reject its very right to exist